State looking at criminal charges against former CPUC president

Michael Peevey, shown in 2014, met with a utility executive to discuss the financial terms of shutting down the San Onofre nuclear power plant.

Michael Peevey, shown in 2014, met with a utility executive to discuss the financial terms of shutting down the San Onofre nuclear power plant.

Photo: Jeff Chiu, Associated Press

Photo: Jeff Chiu, Associated Press

Image
1of/1

Caption

Close

Image 1 of 1

Michael Peevey, shown in 2014, met with a utility executive to discuss the financial terms of shutting down the San Onofre nuclear power plant.

Michael Peevey, shown in 2014, met with a utility executive to discuss the financial terms of shutting down the San Onofre nuclear power plant.

Photo: Jeff Chiu, Associated Press

State looking at criminal charges against former CPUC president

1 / 1

Back to Gallery

State Attorney General Kamala Harris’ office is considering criminal charges against Michael Peevey, former president of the California Public Utilities Commission, for his private meeting with a Southern California Edison Co. executive about financial arrangements for shutting down the San Onofre nuclear plant, according to newly disclosed legal documents.

A sworn affidavit filed by a state investigator in a Los Angeles court Sept. 25 said there was evidence that Peevey and Stephen Pickett, Edison’s executive vice president for external relations, had violated a state law against ex parte communications — private contacts between a regulatory official and a regulated entity about issues the agency is considering.

Engaging in such communications is a misdemeanor, and conspiring to do so can be charged as a felony.

Unfair advantage

There is “probable cause to believe” that Pickett and Peevey “knowingly engaged in and conspired to engage in prohibited ex parte communications regarding the closure of a nuclear facility, to the advantage of (Edison) and to the disadvantage of other interested parties,” said the agent, Reye Diaz.

Diaz said Peevey also “conspired to obstruct justice by illegally engaging in ex parte communications, concealed ex parte communications, and inappropriately interfered with the settlement process.”

Peevey, 76, has not commented on the allegations. The Public Utilities Commission did not respond to a request for comment Wednesday.

There was also no comment from the office of Gov. Jerry Brown. A San Francisco judge will consider next month whether to order disclosure of e-mails between Brown’s office and Michael Picker, the governor’s appointee as commission president, over the San Onofre closure and settlement.

Retired in 2014

Peevey retired from the commission in December 2014, at the end of his term. He had been besieged by revelations of private contacts between Pacific Gas and Electric Co. executives and the commission, including Peevey’s chief of staff and commission member Mike Florio, over the regulatory agency’s handling of a major rate-setting case and other matters.

San Onofre, on the north coast of San Diego County, was shut because of a radiation leak in January 2012 and never reopened. In November 2014, the utilities commission approved a settlement that assigned about 70 percent of the $4.7 billion closure cost to customers of the plant’s two owners, Edison and San Diego Gas and Electric Co.

Consumer advocates agreed to the settlement but have asked the commission to reconsider it after learning of Peevey’s private negotiations. The commission says it will consider their request in January.

“President Peevey’s involvement (in approving the settlement) was completely tainted by these backdoor meetings,” Mindy Spatt, spokeswoman for The Utility Reform Network, a consumer organization, said Wednesday. “Corruption flourished during his regime.”

Poland talks

The San Onofre discussion took place in March 2013 at a hotel in Warsaw, where Peevey was traveling on unrelated commission business. According to notes seized by Diaz in a court-approved search of Peevey’s home in January, the commission president and Pickett discussed the terms of a plant closure settlement, including employee compensation, recovery for investors and costs to customers.

In particular, the agent said, Peevey insisted that the utility provide $25 million to UCLA for research on greenhouse gases. Pickett and other Edison officials did not initially agree to funding the UCLA project, but it was part of the November 2014 settlement.

A lawyer who was asked by a state Assembly committee to analyze the notes seized from Peevey’s home said Wednesday that the private discussions had allowed Edison to strengthen its negotiating stance for the eventual settlement, possibly costing customers as much as $1.3 billion.

Diaz’s court affidavit also mentioned Florio, the commissioner assigned to the Edison settlement. The agent said Edison’s president, Ron Litzinger, had described a conversation with Florio in which the commissioner said he discussed the Warsaw meeting with Peevey’s chief of staff and concluded that it did not have to be disclosed.

But the commission later reached the opposite conclusion.

Edison disclosed the private meeting to the state agency in February 2015, after The Chronicle and other news media reported that the agent had searched Peevey’s home. The utility explained that it had learned only recently that Pickett had initiated some of the discussion of the proposed settlement terms.

On Dec. 3, the commission fined Edison $16.7 million for previously concealing the contacts between its executive and Peevey.